Bell tolls for Dignity as a funeral crackdown bites
MORE than £82m was wiped off the value of funerals provider Dignity in a Government crackdown on the industry.
The London-listed firm’s shares plunged 13.6pc, or 165p, to 1050p after a probe was announced yesterday by the Competition and Markets Authority.
It warned the average cost of a funeral had rocketed to £3,800 – a massive strain on family finances.
The Government also said it was concerned about self-regulation in pre-paid funerals. Some grieving families were not being treated fairly by providers, it said.
In Britain, Dignity and Co-op Funeralcare, part of Co-operative Group, dominate the market. Their offers include pre-paid plans that let customers pay for a funeral at the market price at the time of agreement.
Both companies welcomed the news and said they had previously called for more transparency.
Co-operative Group said it has introduced new products and initiatives to help tackle funeral affordability. Annual sales of funeral plans have more than tripled between 2006 and 2017, the Government said.
But John Glen, economic secretary to the Treasury, said: ‘I’m appalled by the lengths that some dishonest salesmen have gone to in order to sell a plan.
‘There are thousands of pre-paid funeral plans bought each year, and most providers are fair and legitimate. But tougher regulation will ensure robust standards are enforced for all plan providers, and protect individuals and their families if things go wrong.’
Analysts at broker Peel Hunt said the review came at a bad time for Dignity, as it trials new price
models. It kept the stock’s rating on ‘hold’.
The FTSE 100 edged up 0.31pc, or 23.57 points, to 7701.77 while the FTSE 250 rose 0.67pc, or 138.66 points, to 20,984.92.
First Group shares motored higher after the bus and train operator signalled it is open to bids. The FTSE 250-listed owner of Great Western Railway dumped boss Tim O’Toole this week after a painful £326m loss for the year to March 31. Shares jumped 6.7p, or 6.05p, to 95.85p.
Alfa Financial Software shares crashed after it issued a profit warning. The firm says it has been hit by a major customer’s decision to delay the implementation of its new software. Shares tanked 41.3pc, or 130p, to 185p.
JP Morgan ran the rule over Britain’s biggest housebuilders, upgrading Barratt Developments to ‘overweight’ but cutting Taylor
Wimpey’s to ‘neutral’. Barratt’s shares leapt 2.5pc, or 13.8p, to 559.4p while Taylor Wimpey’s whimpered 0.2pc, or 0.45p, lower to 189.7p.
Jefferies slashed the target price of British American Tobacco from 6000p to 5200p amid declining cigarette sales. Its shares sank 1.1pc, or 43.5p, to 3825.5p.
En+ has been given breathing space after the US extended a deadline for trading in companies covered by Russian sanctions.
London Stock Exchange said it would therefore not suspend trading as planned yesterday and would monitor the situation.
The aluminium giant is negotiating with the US Government to avoid sanctions imposed on Russian firms and individuals linked to the Kremlin. The US is reportedly willing to let EN+ escape sanctions as long as owner and oligarch Oleg Deripaska reduces his grip on the company. Video games maker Codemasters had a strong start to trading on London’s junior stock exchange. The company’s shares joined AIM at 200p, and finished the day up 32.5pc at 265p.
Warwickshire-based Codemasters was founded 31 years ago and is behind the official F1 motor racing games.